, Columnist
Capitalism Will Shrink Inequality. In Fact, It's Happening.
Rising prosperity widened income gaps in Latin America and China, but the trend is reversing.
It's getting better.
Photographer: Nelson Ching/BloombergThis article is for subscribers only.
Does capitalist economic growth lead to greater inequality, or less? The mid-20th-century economist Simon Kuznets believed that at first, industrialization would lead to greater inequality as a few pioneering entrepreneurs and workers moved to the cities where the growth was happening. But as rural areas emptied out and the economy matured, he said, inequality would fall. This prediction contradicted Marxist ideas, which envisioned a capitalist class steadily immiserating the workers of the world. The solution to the problems of capitalist growth, Kuznets asserted, was more capitalist growth.